Steve Jurkovich: Kiwibank CEO ahead of the Official Cash Rate announcement

Kiwibank has already made a cut ahead of this afternoon’s OCR announcement. 

The Reserve Bank is set to announce a cut to the Official Cash Rate, with economists and the market predicting a cut of 50 basis points. 

Kiwibank has taken 50 basis points off their floating loan rates, potentially pre-empting the bank’s decision.  

CEO Steve Jurkovich told Mike Hosking that they’d be disappointed if the Reserve Bank were to only cut by 25 points. 

He said that people, businesses, and their customers are really, really hoping for 50, and he thinks it's the right thing to do. 

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Episode Transcript

Speaker 1 (00:00):
It feels like I said every time these days, but

(00:01):
the ocr call today is as important as any given
the state of this economy of ours. Most banks want fifty,
if not seventy five. Ki Bank got a headline yesterday
by cutting big on their floating rate and anticipation at
Kiev Bank CEO Steve Byukovich's bag with a Steve very
good morning to you. Somebody said it was pure headlines
on your part? Was it pure headlines, Steve?

Speaker 2 (00:21):
Well, I mean, obviously, what we're trying to do is
create enough momentum that others will follow. So you know,
I did read that headline and had a bit of
a chuckle to be fair, because ultimately, marketing and branding
is about doing what you are about, and for us,
that was trying to social leadership about a cup.

Speaker 1 (00:39):
Would you be astonished if you went twenty five today, I'll.

Speaker 2 (00:43):
Be really disappointed. I think people, real businesses and our
customers are really really hoping for fifty, and you know
we're predicting fifty. I think that's the right thing to do,
but there's there's got to be a lot more cuts
to follow quickly after that.

Speaker 1 (00:56):
I think, so fifty and fifty for the end of
the year, we think.

Speaker 2 (01:00):
So, I mean neutral remembering is about two and a
half percent or two or three quarters, so we're a
long way away from neutral.

Speaker 1 (01:08):
Do we all agree on this, because in reading all
the commentary, I've got the ends I are in a
couple of independent economists saying, yeah, maybe, but we see
twenty five. What do they see that you don't.

Speaker 2 (01:19):
Well, that's a great question. I mean, I think the
data has been very very clear for quite some time
that we need a cup. So, I mean, it's it's
not an exact science. People, we have different perspectives and
inter put the data in different ways. But I feel
pretty strongly that fifty is the right thing to do,
and that's the right thing to pass on as quickly
as we can.

Speaker 1 (01:37):
And if it's fifty and fifty, is that filled with something?
Not that he'll admit it, but is it filled with
some level of regret that we should be doing twenty five?
It's nice and easy, soft landing, do it properly, But
suddenly two lots of fifteen God knows what next to
you is a cockup?

Speaker 2 (01:52):
Look, I don't know. I mean, I think when you
look to the FED, you just got to understand what
the data tells you. I mean they looked at the
data and said they needed a cup by fifty bent
looks at the data. If tofty is the right call,
then you know, I don't think they need to look
back and understand whether it was too slow too fast.
They just look at the data now and make a decision.
And we think that right season fifty.

Speaker 1 (02:10):
But isn't part of the argument in a fifty or
seventy five? See? I mean, I could tell you see
the American situation was people were panicking about a potential recession.
They're not in recession. There haven't been in recession. They're
not going into recession. We have the damage is there
to be seen, isn't it?

Speaker 2 (02:25):
Yep?

Speaker 1 (02:25):
I think so therefore going fifty is like what's fifty?
Hang on, I'll throw another fifty in there. That's that's
correcting a mistake, isn't it. Well?

Speaker 2 (02:36):
I think ultimately it is a TikTok. I don't think
it's an exact science, and I don't actually think it's
that much of the benefit to look back and go,
you know, as the data clearer than we thought. I
think they're really key thing now is businesses have a
certain year round of great cuts that comes so they
can invest in where people are soulstat differently, you know,
there's hopefully in twelve months and most almost all households

(02:59):
will have seen the benefit us through, so they'll have
a bit more flexibility. So I think it's much more
about the future.

Speaker 1 (03:04):
Okay, So the twenty five we got the first time around,
did that move anything? Did people come knocking at your door?
And if they didn't, will they do it on fifty today?

Speaker 2 (03:12):
I think there was definitely signs of life and the
real estate market definitely signs of business interest. Much more
about the signal rather than the actual financial impact is
you know, we're spoken about that before. I think fifty
probably is a bit of a game change of some
people because you know that will knock on to test
rates coming down and other things that will mean, you know,
borings more affordable.

Speaker 1 (03:32):
Yeah, speaking of the test rates, it was this time
yesterday we're talking some things are doing testing under just
under nine percent. What do you run at at at
the moment and do you defend.

Speaker 2 (03:39):
It eight and a half at the moment and get
it up at the end of today it will be
at eight if we get a fifty point cup. So
you know, we've got to we've got to move of
that and our men. There is always a little bit
of leg because I think those test rates in recent
times proved to be pretty acerate in terms of what
people needed to pay. Yeah, but they need they need
to be they need to be adaptable and they need

(04:01):
to move down to that's a fewpoint you might.

Speaker 1 (04:02):
Always a pleasure to stay appreciate it. Steve Yukobitch the
p Event CEO. For more from the Mic Asking Breakfast,
listen live to news talks.

Speaker 2 (04:10):
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